YOUR CHOCOLATES TO COST MORE?

I cant blame Bloomberg for bleak news. It seems to be the trend these days. But they reported yesterday that our(Indonesia's) cocoa production could fall by as much as 21% in three years. Due to diseases infecting crops. That not a small bunch of beans nor small in consequences considering that Indonesia is the third largest producer of cocoa beans in the world.

Bloomberg quotes Halim Razak, Chairman of the Indonesian Cocoa Association who said yesterday that annual production could fall as much as to 380,000 to 400,000 tons if the diseases are not contained.

The cocoa trees have suffered from the blight of the pod borer larvae the late rains and late flowering and the Vascular Streak Dieback disease.It is very serious because 60 percent of trees in Sulawesi, Indonesia's main cocoa producing region, have been infected.

Halim Razak said yields can fall to 380kg a hectare, from the current 500.

Yesterday's Cocoa for December Delivery fell 2.1 percent to $2,540 a ton on ICE Futures US. The most active contract reached $3,290 a ton the highest in twenty years.

Earlier the International Cocoa Organisation had predicted that Indonesia's cocoa production for 12 months, ending October may only total 480,000 tons. Indonesia produced 530,000 tons in 2007.

Last month Mars Inc, makers of M&M and Snickers, said it was girding up to persuade cocoa farmers in Indonesia to raise production by planting cloned seedlings. The Company confidently stated that cocoa has a definite future in this country. Mars is working in Sulawesi as part of a sustainability programme funded by the Indonesian Cocoa Association, Australia, Belgium, Germany, the Indonesian Government, Switzerland, the Netherlands and the International Finance Corporation.

The Indonesian Government Ministry of Industry handbook( the best I have seen) commits that Sulawesi will be developed as a cocoa producing center.

Crop diseases may cost the Indonesian Farmer as much as $388million in output losses.

Mars Symbioscience coordinator Mohd. Hussin Purong said last month that his team was trying to persuade farmers to prune or cut down diseased trees and teaching them the benefits of composting to improve yields. Compositing has revived some trees and farmers are prepared to learn about clones derived from disease resistant strains.

On the market front Hershey's have already raised prices amidst rising costs.

CHOCOLATE AT THE OLYMPICS

At what is going to be the grandest Olympics ever, Chocolate will be participating. Snickers has been appointed the Official Chocolate of the Beijing Olympics. This rich chocolate bar studded generously with peanuts will provide athletes, officials and spectators will the energy they are going to need. In Indonesia, Snickers distributed by Nirwana Lestari, will in Indonesia shy away from any publicity.

The China English Language Daily reports the some athletes have included chocolate as part of their training diet. Among them are swimmers, Australian Libby Trickett and American Katie Nott. The latter preferring a peanut-brittle bar coated with chocolate.

The Swiss Embassy will be holding a chocolate exhibition of their products during the Games. Hershey's, though not officially connected will be running an interesting and involving promotion supporting the US athletes, called"Taste of Victory".

George Bush, getting int right, send off the US Olympic team with a dinner at the White House.
For dessert the President served the "Chocolate Olympic Torch"- a dark chocolate tart with raspberries and a brown-sugar Olympic flame.

CNN reports that taxi drivers in Beijing have nicknamed the city, "Chocolate City" because of the large presence of Africans.

In the meantime chocolate consumption in China is increasing, according to conservative estimates at 8% per annum, and by 15% by other estimates. With the current percapita consumption at 100-150gm there is obviously great opportunities. In Shanghai it is one kilogram of chocolate per head per year. If the Chinese in the Eastern, affluent seaboard cities alone, eat as much chocolate as the Japanese(2.2kg) chocolatiers will have a potential of 800,000 metrics tons of chocolate per year.

That's why Barry Callebaut has set up a factory there(operational this year). That is why BT Cocoa of Indonesia have smartly networked themselves in the China chocolate market also taking advantage of the removal of import taxes.

The China chocolate market as a whole is the second biggest in the region, after Japan. China Food Industries says that the annual consumption worth CNY3billion is projected to reach CNY20billion(about USSIbillion) by 2012.

If this figure is reached it will make China the Gold Medal winner of the world chocolate race.